Regulator to pass on I.P.O. review powers
The reform-minded chairman of the securities commission prefers the disclosure system so that investors can make up their own minds
Beijing is likely to reform further the mainland's system for share offerings in the next few months.
The China Securities Regulatory Commission (CSRC) plans to relinquish its responsibility in reviewing applications by companies to raise funds.
Two investment bankers with knowledge of the regulator's thinking say it is determined to introduce a disclosure-based system for initial public offerings (IPOs) and share placements.
The commisision would first let the Shanghai and Shenzhen exchanges take responsibility for reviewing all refinancing proposals by listed firms, they said.
"The policy would be implemented either at the end of this year or early next year," one of the bankers said. "It is highly expected that a further reform of the IPO system would follow."
After commission chairman Guo Shuqing took office late last year, the reform-minded banker, formerly chairman of China Construction Bank, has advocated the disclosure-based system used in the United States.
The commission now vets all IPO applications from firms wishing to list on the A-share market. It has to assess an applicant's earnings prospects before granting approval for an IPO.